Introduction
In "PostCapitalism: A Guide to Our Future," Paul Mason presents a thought-provoking analysis of the current state of capitalism and its potential future. Mason argues that the capitalist system as we know it is reaching its limits and that a new economic model is emerging. This book explores the reasons behind capitalism's decline and offers a vision of what might come next.
Mason's work is particularly relevant in today's rapidly changing world, where technological advancements and global challenges are reshaping our economic landscape. He presents a compelling case for why we need to rethink our economic systems and how we might transition to a postcapitalist society.
The Broken System of Neoliberal Capitalism
Mason begins by examining the current state of neoliberal capitalism, which has been the dominant economic model in Western countries for several decades. He argues that this system is fundamentally broken and unsustainable.
Fiat Money and Its Consequences
One of the key issues Mason identifies is the use of fiat money. This type of currency, not backed by gold or silver, derives its value solely from the state that issues it. While fiat money can be useful in countering financial crises, it also creates long-term problems.
For example, during the 2015 European financial crisis, the European Central Bank printed €1.6 trillion to stabilize the economy. This practice allows governments to take on more debt, even when they're unlikely to be able to repay it in the future. As a result, many countries find themselves sinking deeper into debt that they can't repay, creating a cycle of financial instability.
The Problem of Financialization
Another major issue Mason highlights is financialization, which began in the 1980s. This process involves compensating for stagnant incomes in the workforce by providing easy credit from banks. Credit cards, overdrafts, mortgages, student loans, and car loans have become a regular part of everyday life in neoliberal economies.
The problem with this approach is that it leads to an increasing amount of imaginary money in the economy. This money is generated purely by the interest owed on loans and credits, rather than being backed by real economic activity. Over time, this creates a fragile economic system prone to crashes and crises.
Global Imbalances
Mason also points to global imbalances as a significant factor in the decline of neoliberalism. These imbalances refer to the differences between a country's imports and exports of goods, services, and investments. Countries like the United States and most of Europe are in deficit, meaning they import more than they export. On the other hand, countries like Germany, China, Japan, and oil-producing Arab nations have significant surpluses.
These imbalances force deficit countries into increasing debt, which eventually led to the 2008 financial crisis. Greece, for example, amassed a huge amount of debt but had no way to earn enough money to pay it off. This resulted in a downward spiral of austerity, causing thousands of people to lose their jobs and homes.
The Information Technology Revolution
The final factor Mason identifies in the decline of neoliberalism is the information technology revolution. This shift fundamentally challenges the principles of property ownership on which neoliberalism is founded. In our increasingly information-based world, traditional notions of property and value are becoming less relevant.
Mason uses Wikipedia as an example of this shift. It's impossible to determine Wikipedia's value using traditional metrics like profits or revenue. Moreover, Wikipedia doesn't really belong to anyone in the traditional sense; it belongs to everyone. This type of information good conflicts with neoliberal market mechanisms, and we're likely to see more of these goods in the future.
The Historical Context: Capitalism's Cycles
To better understand the current state of capitalism, Mason delves into its historical context. He draws on the work of Nikolai Kondratieff, a twentieth-century economist who proposed that capitalism moves in cycles rather than collapsing in crises.
Kondratieff Waves
According to Kondratieff's theory, each economic cycle has an upswing of about 25 years, followed by a downswing of 25 years. The upswing is driven by the development of new technology and high investment, while the downside typically ends with economic depression, high unemployment, bankruptcy, and the unavailability of credit.
Building on Kondratieff's work, other economists have identified four main cycles in the history of capitalism:
- 1790 to 1848
- 1840 to the mid-1890s
- Mid-1890s to 1945
- 1945 to 2008
The fourth cycle, which began in 1945, was largely shaped by the invention of the transistor. The period from 1945 to 1973 saw no recessions, but since 1973, we've experienced six recessions, culminating in the 2008 financial crisis.
A Disruption in the Pattern
Mason argues that there seems to be a disruption in this cyclical pattern. In the 1990s, at the end of the fourth wave, elements of a fifth wave started to appear, thanks to the introduction of new network technology, mobile communications, and a more connected global marketplace.
However, this wave appears to have been stalled by the failure of neoliberalism. Mason suggests that this might indicate that capitalism's adaptability has finally reached its limit, and we're entering a new phase of economic development.
The Rise of Information Technology and Its Impact
A significant portion of Mason's book focuses on the transformative power of information technology and how it's leading us toward a postcapitalist economy.
The Knowledge Economy
Since the 1990s, the rise of personal computers and information sharing has dramatically changed our economic landscape. New concepts like the knowledge economy, cognitive capitalism, and info-capitalism have emerged, challenging traditional capitalist models.
Information Goods and Market Dynamics
Mason argues that the idea of "information technology" fundamentally contradicts how supply and demand function in a capitalist economy. Our economy is increasingly based on information products like software, ebooks, online news articles, and digital music.
These information goods work very differently from physical goods. They can be copied and shared at little to no cost, which has major implications for the market. Traditional economic theory rests on the idea of scarcity: a physical product's value depends on how limited or scarce it is. Information goods, however, are potentially unlimited, making traditional supply and demand dynamics irrelevant.
Non-Capitalist Modes of Production
Information technology also allows for new, non-capitalist modes of production. Mason uses Wikipedia as an example again, pointing out that it has over 24 million registered users who contribute to it voluntarily. It's free, doesn't make a profit, and isn't anybody's property in the traditional sense.
This type of economic system, with free goods and no property rights, cannot be considered capitalist. Mason argues that information technology is undermining the fundamental principles of how capitalism operates, leading us toward a postcapitalist society.
Marx's Labor Theory and Its Relevance Today
In discussing the value of information goods, Mason turns to Karl Marx's labor theory of value. He argues that while capitalist theory struggles to account for the value of free online goods, Marx's theory provides a useful framework.
The Labor Theory of Value
According to Marx's labor theory, a commodity's value is determined by the number of socially necessary hours required to produce it. "Socially necessary" hours aren't merely the number of hours a person works, but the average amount of labor time needed to produce the good.
Mason suggests that information goods can be thought of as a form of finished labor: their value depends on how much effort went into producing them. This theory allows us to assign value to information goods in a way that traditional capitalist models cannot.
Marx's Mistaken View of the Proletariat
While Mason finds value in Marx's labor theory, he argues that Marx was mistaken about the role of the working class. Marx believed that only the proletariat could push society out of capitalism by rebelling against it. However, capitalism has persisted for 200 years, and the proletariat has never been a long-term, serious threat to it.
Instead, Mason points out that capitalism has acquired new enemies in recent years. These include people who show their dissatisfaction with the current system by participating in protests, occupying financial districts, or blockading fracking sites. He argues that there's growing global dissatisfaction with the current economic system and the problems it has caused, particularly climate change.
The Transition to Postcapitalism
Mason dedicates a significant portion of the book to discussing how we might transition from capitalism to postcapitalism. He draws parallels with the historical transition from feudalism to capitalism to illustrate the complexity and length of such a process.
The Fall of Feudalism
Mason explains that the transition from feudalism to capitalism was a lengthy and complex process. Feudalism, which flourished from the ninth to the fifteenth century, was undermined by four main factors:
- A series of terrible famines starting in the 1300s
- The rise of new economic powers with the growth of banking in the fifteenth century
- The conquest of the Americas, which began around 1500 and brought further trade and prosperity
- The development of the printing press in 1450, which catalyzed the scientific revolution
Despite these factors, the transition from feudalism to capitalism still took several hundred years.
Factors Driving the Transition to Postcapitalism
Mason argues that the transition from capitalism to postcapitalism will also be a lengthy process, shaped by technology and global shifts. He identifies several key factors driving this transition:
Information technology: As discussed earlier, this is undermining traditional capitalist models of property and value.
Energy depletion: The finite nature of fossil fuels is challenging our current economic models.
Climate change: This global threat requires a coordinated response that capitalism struggles to provide.
Aging populations: Developed countries are facing demographic shifts that will strain their economies.
Migration: Increasing global migration is reshaping labor markets and social structures.
Mason emphasizes that capitalism can't adequately react to these challenges. For example, the supply and demand dynamics of the oil market make it difficult for capitalism to address climate change effectively.
The Role of the State in Transitioning to Postcapitalism
Mason argues that the state could play a crucial role in facilitating the transition to a postcapitalist economy. He proposes several steps that governments could take:
Reforming the Market
The state could reform the market to favor sustainable, collaborative, and socially just projects. This could include providing tax incentives for renewable energy projects or local energy systems. The tax system could also be adapted to favor the creation of non-profit organizations and collaborative production. Company regulations could be changed to encourage the creation of living-wage jobs instead of low-wage ones.
Stopping Privatization and Dismantling Monopolies
Mason suggests that states serious about transitioning to postcapitalism should immediately halt privatization, which outsources public services like health, education, and transportation. They should also work to break up monopolies, which allow companies to charge unreasonably high prices for their goods. When a monopoly needs to be broken, its services could be transferred to public ownership.
Addressing Government Debt
States need to find ways to pay off their debts, as this problem will only worsen over time if left unaddressed. Mason argues that tackling this issue is crucial for a stable transition to a new economic model.
Implementing a Universal Basic Income
One of Mason's more radical proposals is for states to provide all citizens with a basic income. This unconditional income, funded by taxation, would replace unemployment benefits and give people time to volunteer, develop new ideas, or contribute to collaborative projects like Wikipedia. Mason argues that this could unleash a wave of innovation and creativity.
The Power of Collaboration
Throughout the book, Mason returns to the theme of collaboration as a key driver of the new economic era. He sees projects like Wikipedia as powerful examples of what can be achieved when people work together outside traditional market structures.
In the postcapitalist vision Mason presents, collaboration becomes a central organizing principle of the economy. Instead of competition driving innovation and progress, it would be the collective efforts of individuals working towards common goals.
Challenges and Criticisms
While Mason's vision of postcapitalism is compelling, it's important to note that it's not without its critics. Some economists argue that his analysis underestimates the adaptability of capitalism and overestimates the disruptive power of information technology.
Others point out that the transition to a postcapitalist society would likely face significant resistance from those who benefit from the current system. The practical challenges of implementing some of Mason's proposals, such as a universal basic income, are also subjects of ongoing debate.
Despite these criticisms, Mason's work provides a valuable contribution to the discussion about the future of our economic systems. It challenges us to think beyond the constraints of our current model and imagine new possibilities for organizing our economies and societies.
Conclusion
In "PostCapitalism," Paul Mason presents a bold vision of a future beyond our current economic system. He argues convincingly that capitalism, in its current neoliberal form, is reaching its limits. The combination of technological change, global challenges like climate change, and inherent contradictions within capitalism itself are pushing us towards a new economic paradigm.
Mason's analysis of the problems with our current system is incisive, drawing on a wide range of economic theories and historical examples. His exploration of how information technology is fundamentally changing the nature of goods and challenging traditional notions of scarcity is particularly compelling.
The vision of postcapitalism that Mason presents is one of increased collaboration, reduced working hours, and a focus on sustainability and social justice. While the path to this future is not clear-cut, Mason provides thought-provoking suggestions for how we might begin to move in this direction.
Perhaps most importantly, "PostCapitalism" encourages us to think critically about our current economic system and to imagine alternatives. In a world facing significant challenges, from inequality to climate change, this kind of creative thinking is crucial.
Mason's work serves as a call to action, urging us to actively shape the future of our economic systems rather than passively accepting the status quo. Whether or not one agrees with all of Mason's conclusions, "PostCapitalism" offers a valuable contribution to the ongoing debate about the future of our economies and societies.
As we move further into the 21st century, the ideas presented in this book will likely become increasingly relevant. The transition to a postcapitalist society, if it occurs, will be a complex and lengthy process. But by understanding the forces at play and actively engaging with these ideas, we can hope to shape a future that is more equitable, sustainable, and aligned with human needs and values.
In the end, "PostCapitalism" is not just a critique of our current system or a prediction of what's to come. It's an invitation to participate in the creation of a new economic model – one that harnesses the power of technology and human collaboration to address the challenges of our time and create a more just and sustainable world.